
clear
set more off
capture log close
*macro drop _all
cd "P:\2018\186"

/* SEQUENTIAL MODEL */
local model_descr "Sequential model (AM): decomposition for parents (pi from Yc, restrict pi1)"


gl data_dir "P:\2018\186/use"
gl save_dir "P:\2018\186/Martin/Decompositions_SE_extLLSMM"

* CHOOSE subsample  

 *income years for children (not survey years)
 loc yrmin= ${yrmin} // earliest possible=1985	
 loc yrmax= ${yrmax} // latest possible=2016
 
	*STUBNAME for saving log file and output matrix/dataset 
	local modelnum "5bavg"
	global stubfilenm "SE_model_`modelnum'_seq_`yrmin'_`yrmax'"
	local parent "mfavgrank"
  
	*LOG file 
	log using ${save_dir}/${stubfilenm}.log, replace
  
  *child ages to observe their adult incomes
  loc agemin=25 // youngest possible=25
  loc agemax=48 // oldest possible=48
  
  *child birth cohorts to use
  loc cohortmin=1952 // earliest possible=1952
  loc cohortmax=1994 // latest possible=1991



*USE the ranked main sample DATA (children matched to mother or father)
use *idnr *earn* *yob *obsy *max* *edu* *emp* year woman if year>=1985 using "use\swepanel_zeros", replace
/*
set seed 12354586
gen r=runiform()		// Draw sample for speed
keep if r<0.2
*/

* Rename variable names

rename pmearn pm_LAB
rename pfearn pf_LAB
rename pearn pLAB

rename memp m_emplavg
rename femp f_emplavg
rename emp employ

rename medu m_schmax
rename fedu f_schmax
rename edu schmax

ren idnr newid
ren midnr m_newid
ren fidnr f_newid

gen AGEC=year-yob		// Age variables and normalization
gen AGEC1=AGEC-40		
g f_LABAGE_1=fobsy-fyob
g m_LABAGE_1=mobsy-myob
forval i=2/4{
	g AGEC`i'=AGEC1^`i'
	g f_LABAGE_`i'=f_LABAGE_1^`i'
	g m_LABAGE_`i'=m_LABAGE_1^`i'
}



* SAMPLE selection

* Use sample with mothers AND fathers
 keep if pm_LAB!=. & m_LABAGE_1!=. & pf_LAB!=. & f_LABAGE_1!=.
 keep if m_emplavg!=. & f_emplavg!=.
 keep if m_schmax!=. & f_schmax!=.


*Create average parent rank 
gen p_avgLAB=(pm_LAB+pf_LAB)/2 

*Create average parent age measure
gen p_avgAGE_1=(m_LABAGE_1+f_LABAGE_1)/2
gen p_avgAGE_2=p_avgAGE_1^2
gen p_avgAGE_3=p_avgAGE_1^3
gen p_avgAGE_4=p_avgAGE_1^4


* Residualize all measures using parent average age
 foreach var in pLAB employ schmax pm_LAB m_emplavg m_schmax pf_LAB f_emplavg f_schmax p_avgLAB {
	qui regress `var'   AGEC? i.year m_LABAGE_? f_LABAGE_? 	// p_avgAGE_? 
	predict `var'_r, resid
 }
 
 * Subsample 
 keep if inrange(year,`yrmin',`yrmax') & inrange(AGEC,`agemin',`agemax')
 tab year, su(AGEC)		

* ESTIMATE MODEL 

scalar drop _all

*Sample sizes
qui reg pLAB_r pf_LAB_r, cluster(newid)
scalar N=e(N)
scalar Nkids=e(N_clust)
qui reg pLAB_r pf_LAB_r pm_LAB_r, cluster(f_newid)
scalar Nfathers=e(N_clust)
qui reg pLAB_r pf_LAB_r pm_LAB_r, cluster(m_newid)
scalar Nmothers=e(N_clust)

scalar list Nkids Nfathers Nmothers

* "IGE"
regress pLAB_r p_avgLAB_r 
 scalar IGE=_b[p_avgLAB_r]

*** PARENT
* Assortative mating (focusing on mothers so regress fathers on mothers)
 reg f_schmax_r m_schmax_r
	predict eta_sp, resid 
	scalar d1=_b[m_schmax_r]

* Parent employment: Ep = phi1*Hp + phi2*Hsp + eta_ep
 reg m_emplavg_r m_schmax_r f_schmax_r 
 	predict eta_ep, resid
	scalar phi1=_b[m_schmax_r] 
	scalar phi2=_b[f_schmax_r]
	
 reg m_emplavg_r f_schmax_r // look at unconditional employment response to spouse HC
	
* Parent income: Yp = O_0p*Ep + O_1p*Hp + eta_p
 reg pm_LAB_r m_emplavg_r m_schmax_r  	

* Parent Income: Yp = [O_0p(phi1+phi2*d1)+O_1p]*Hp + O_0p*phi2*eta_sp + O_0p*eta_ep + eta_p	
	gen eta_spep=(phi2*eta_sp)+eta_ep 
	reg pm_LAB_r m_schmax_r eta_spep
	predict eta_p, resid  
		
	scalar O_p=_b[m_schmax_r] 						//  get coefficient = estimate of (theta_0p + theta_1p)
	scalar O_0p=_b[eta_spep] 						//  get coefficient = estimate of theta_0p 
	scalar O_1p=_b[m_schmax_r]-(((d1*phi2)+phi1)*_b[eta_spep]) 	// calc coefficient = estimate of theta_1p 
	
	scalar list 
			
	
* Check predicted parent income rank.
   gen pm_LAB_pred=O_p*m_schmax_r + O_0p*phi2*eta_sp + O_0p*eta_ep + eta_p  		
   sum pm_LAB_r pm_LAB_pred  
   corr pm_LAB_r pm_LAB_pred 
   corr pm_LAB_r pm_LAB_pred, cov 
   reg pLAB_r pm_LAB_r
   reg pLAB_r pm_LAB_pred
        
  
  
*** SPOUSE  
* Spouse assortative mating (to get AM residuals, eta_ss)
 reg m_schmax_r f_schmax_r
	predict eta_ss, resid 	
	scalar d1s=_b[f_schmax_r]

	reg f_schmax_r m_emplavg_r  // look at unconditional employment response to spouse HC

* Spouse Employment (to get employment residuals, eta_es)
  reg f_emplavg_r f_schmax_r m_schmax_r 
 	predict eta_es, resid
	scalar phi1s=_b[f_schmax_r] 
	scalar phi2s=_b[m_schmax_r]
	
* Spouse Income (to get residuals, eta_s; also get O_s HC effect and O_0s)
  gen eta_sses=(phi2s*eta_ss)+eta_es
  reg pf_LAB_r f_schmax_r eta_sses 
	predict eta_s, resid  
	scalar O_s=_b[f_schmax_r]
	scalar O_0s=_b[eta_sses]
	scalar O_1s=_b[f_schmax_r]-(((d1s*phi2s)+phi1s)*_b[eta_sses]) 	// calc coefficient = estimate of theta_1s 
	
	scalar list 
	
*Check spouse predicted income rank.
   gen pf_LAB_pred=O_s*f_schmax_r + O_0s*phi2s*eta_ss + O_0s*eta_es + eta_s 
   sum pf_LAB_r pf_LAB_pred 



*** CHILD 
* Child income
 reg pLAB_r schmax_r 
	predict u_c, resid 
   
* Child human capital: Hc = pi1*Yp + pi2*Hp + psi_c	
 reg schmax_r pm_LAB_r m_schmax_r 
	predict psi_c, resid // residual child HC 

	
* Child income - Get pi1, pi2, pi1s, pi2s (restrict pi1, pi1s)
 generate eta_py= (O_0p*phi2*eta_sp)+(O_0p*eta_ep)+eta_p
 generate eta_spy=(O_0s*phi2s*eta_ss)+(O_0s*eta_es)+eta_s
regress pLAB_r m_schmax_r f_schmax_r eta_py eta_spy  
	scalar pi1= _b[eta_py] 
	scalar pi2= _b[m_schmax_r]-(O_p*_b[eta_py]) 
	scalar pi1s=_b[eta_spy] 
	scalar pi2s=_b[f_schmax_r]-(O_s*_b[eta_spy]) 
	scalar list pi1 pi2 pi1s pi2s 
	
*Check child predicted income rank.
gen pLAB_pred=(pi2*m_schmax_r)+(pi2s*f_schmax_r)+(pi1*pm_LAB_r)+(pi1s*pf_LAB_r) 
 su pLAB_r pLAB_pred 
 reg pLAB_pred pm_LAB_pred 
 reg pLAB_r pm_LAB_r 
 
	
* DECOMPOSITION 

	*Get variances of parent income elements
	 su m_schmax_r
	 scalar vHp=r(Var)
	 su eta_sp
	 scalar vEta_sp=r(Var)
	 su eta_ep 
	 scalar vEta_ep=r(Var)
	 su eta_p 
	 scalar vEta_p=r(Var)
	 
	 su eta_py
	 scalar vEta_py=r(Var)
	 scalar list vEta_py
	 di ((O_0p^2)*(phi2^2)*vEta_sp)+((O_0p^2)*vEta_ep)+(vEta_p)

	 
	 *Get variances of parent income elements - fathers
	 su f_schmax_r
	 scalar vHsp=r(Var)
	 su eta_ss
	 scalar vEta_ss=r(Var)
	 su eta_es 
	 scalar vEta_es=r(Var)
	 su eta_s 
	 scalar vEta_s=r(Var)

	 su eta_spy 
	 scalar vEta_spy=r(Var)	 
	 
	*Get covariances for parent/spouse components
	corr m_schmax_r eta_spy, cov 
	scalar CovHpEspy=r(cov_12)
	
	corr f_schmax_r eta_py, cov
	scalar CovHspEpy=r(cov_12)
	
	corr eta_sp eta_spy, cov 
	scalar CovEspEspy=r(cov_12)
	
	corr eta_ep eta_spy, cov 
	scalar CovEepEspy=r(cov_12)
	
	corr eta_p eta_spy, cov 
	scalar CovEpEspy=r(cov_12)
	
	corr eta_py eta_spy, cov 
	scalar CovEpyEspy=r(cov_12)


	 su p_avgLAB_r
	 di r(Var)
	 scalar vYp=.25*((O_p^2)*vHp + vEta_py + (O_s^2)*vHsp + vEta_spy) + .5*((O_p*O_s*d1*vHp) + (O_p*CovHpEspy) + (O_s*CovHspEpy)+ CovEpyEspy)
	 di vYp
	 	
	
*IGE calc:  
scalar B=.5*( ///
((pi1*O_p)+pi2)*O_p*(vHp/vYp) + ((pi1s*O_s)+pi2s)*O_p*d1*(vHp/vYp) + pi1*(vEta_py/vYp) + (O_p*pi1s*CovHpEspy/vYp) + (pi1s*CovEpyEspy/vYp) + ((pi1s*O_s)+pi2s)*(CovHspEpy/vYp) + ///
((pi1s*O_s)+pi2s)*O_s*(vHsp/vYp) + ((pi1*O_p)+pi2)*O_s*d1s*(vHsp/vYp) + pi1s*(vEta_spy/vYp) + (((O_p*pi1)+pi2)*CovHpEspy/vYp) + (pi1*CovEpyEspy/vYp) + (pi1*O_s)*(CovHspEpy/vYp) ///
)
scalar list B IGE



*SAVE OUTPUT
clear 

local IGAs		"IGE B"
local pis 		"pi1 pi2 pi1s pi2s"
local varcovs 	"vYp vHp vEta_ep vEta_p vEta_sp vEta_py vHsp vEta_ss vEta_es vEta_s vEta_spy CovHpEspy CovHspEpy CovEpyEspy CovEspEspy CovEepEspy CovEpEspy"
local param		"O_0p O_1p O_p phi1 phi2 phi1s phi2s d1 d1s O_0s O_1s O_s"						
local Ns		"N Nkids Nfathers Nmothers"


local rownamelist ""
matrix $stubfilenm=(0)
foreach xx in `IGAs' `pis' `varcovs' `param' `Ns' {
	sca y=`xx'
	matrix $stubfilenm=$stubfilenm,y
	local varnamelist "`varnamelist' `xx'"
}
matrix ${stubfilenm}=${stubfilenm}[....,2....]
matrix colnames ${stubfilenm}=`varnamelist'
scalar drop y

svmat2 ${stubfilenm}, names(col)
gen model_descr="`model_descr'"
gen modelnum="`modelnum'"
gen yearmin=`yrmin' 
gen yearmax=`yrmax'
gen parent="`parent'"
save ${save_dir}/${stubfilenm}.dta, replace



clear
log close 
	
